welcome back to "squawk on the street." markets are higher to start the week with nine of the 11 sectors in the s&p trading in the green. one standout is energy, as oil prices sink more than 2% that does itfor this hour of "squawk on the street. let's send it back downtown to the new york stock exchange for the start of "squawk alley." guys, back over to you >> dom, thank you very much. good morning, it is 10:00 a.m. at meredith headquarters in des moines, iowa, it's 11:00 a.m. on wall street, and "squawk alley" is live. ♪ ♪ good morning, welcome to

"squawk alley. i'm carl quintanilla with john fortt. retails are stories once again, with online shopping soaring to a record $5.3 billion on black friday alone cyber monday is set to possibly become the biggest internet shopping day in history. for more on that we send it out to our courtney reagan who's at amazon warehouse in robbinsville, new jersey hi again, court. >> good morning to you, carl cyber monday has always been a really big day for amazon, but now that they have the prime day, they are going to have to beat their own record in order for it to be the biggest day of the year for amazon. you can see we're in this fulfillment center in new jersey and it's just one of 75 of amazon's fulfillment centers like this in the country here it covers a million square feet there are 14 miles of conveyer belts running 24/7 thousands of both human employees, as well as robots fulfilling those cyber monday

orders last year amazon said 64 million items were ordered on its website. they are not giving a forecast to expect today, other than saying cyber monday is typically one of the biggest days of the year now, dan ives, who is an analyst, thinks that as much as 50% of all e-commerce sales on black friday go to amazon. that would overindex a typical day when we see about 44% of e-commerce sales happening on amazon's site. when you think about the overall picture, today could be a record day if adobe's predictions come true they are looking for $6.6 billion to be spent online in the u.s. that would be 14.5% above what we saw last year but watch what's going on with mobile shopping. only about one-third of purchases are happening on a mobile device, which is the same as last year, so retailers need to be paying careful attention to make sure that they are still

maximizing performance on the desktop. remember the reason we had cyber monday in the first place, when folks went back to work and were able to shop on their work devices, their laptops, rather, with that fast internet connection so we're going to watch website performance today, so even though retailers stress test those websites under extreme conditions, things happen. for example, we saw h&m's website go down three times over the weekend. lowe's website was out for some period of time on black friday, and even beyond the credit card processing systems macy's was having in store, there were some probation repor probati reports of shoppers having trouble checking outonline amazon has rarely had outages, and it hasn't been on one of the peak shopping days very lucky for this very big retailer melissa, back to you >> thank you, courtney reagan, delving deeper into cyber monday

sales. online transactions from the top 100 u.s. retailers joining us now, adobe's mickey ma marigold, as well as jean muenster i'll kick it off with you. cyber monday is supposed to be the biggest, bestest cyber monday in mankind's history. how does that compare? does this pull forward sales that we would have seen tuesday, wednesday, thursday, friday this week >> you know, cyber monday has always been the big daddy of the holiday ever since it started for online shopping, and that continues this year. we're kicking off with a strong start, and expect we're at $840 million, just day to day, and we're on our way to $6.6 billion. >> and, gene, you've been tracking retailers like walmart and target because you want to see how the iphone x is doing. how is it doing? >> well, it's been what the big

retailers have led with, so we meticulously went through what the promotions have been over the last few days and target, for example, had 30% off an iphone 8, best buy also led with iphone walmart, i would say they have to pull it together, because they were deceptive how they had this $300 promotion on iphones when, in fact, there was almost no inventory we could find probably an old trick, but walmart was more aggressive with that bottom line is this, the iphone seems to be in good shape, but i do have a question for mickey, these really impressive black friday and thanksgiving numbers, i mean, are we essentially just pulling from cyber monday? should we see a dip here on monday >> i don't think so. we're really seeing that the retailers are highlighting different discounts, so you did see the best consumer electronic deals on friday. today's really going to be a big toy discount day there will be electronics, as

well, but they won't be the deep discounts we've seen they've gotten good at optimizing specific categories to be discounted on specific days >> mickey, clarify this for me on mobile, because some stats are that i'm seeing say that mobile is making a big push this year, that it's a bigger share, that conversion rates are better, but then i'm hearing mixed messages how big has mobile been black friday and through the weekend how big do you expect it to be this year? is android closing the gap with iphone and are conversion rates getting better >> so, let me unpack a couple things there so what we are seeing this year for the first time is that mobile visits are becoming the majority of visits soar have tus desktop. so we're at 53.6% of traffic from mobile devices. while there is a gap with closing on the sales, it's

remarkably closing, that gap is closing remarkably this year so we've got a 21% growth year over year in mobile visits we have got a 41% growth year over year in mobile sales. so we're seeing 53% of traffic coming and 40% of sales. so that gap between the visits and the sales is closing rapidly. people are really figuring out how to use their mobile devices, and i think to the point courtney made earlier, retailers are figuring out how to optimize their sites for mobile in a way so the two come together and what we're seeing is actually people finishing transactions 10% faster than they did last year so from the visit to sales >> that's amazing. yeah, just getting people to navigate is a big issue. gene, the other thing that occurs to me, you look at the

growth numbers and they are astounding we've really heard limited number of examples where servers were down, access to the website was down i wonder just how much work some of these retailers did getting these operations ready for a day like today >> it's a ton of work. they were preparing from the summer on for this for these big spikes the good news is, they are able to do the load balancing now, which they couldn't a few years ago, so we're seeing less of that i want to quickly put in perspective some of these numbers, too, for amazon if, in fact, cyber monday holds up at this 18% growth, there's going to be upside to the overall numbers for the industry, the e-commerce industry there's going to be upside to the amazon numbers for december for the unit growth rates and keep in mind this is the number that always blows me away, still only about 15% of stuff in the u.s. is bought online. we're going to have the same conversations the next few years.

>> upside potentially for apple, as well, gene? >> i think so. i mean we're still seeing even though supplies improved the iphone x, it's still relatively tight. we're not going to reach supply/demand equilibrium until the march quarter. that's good news for investors because some of the demand gets pushed into march and i would look for positive guidance it's still early to be saying that, but i think that's how the supply is setting up, it should be favorable for the march guidance for apple >> gene, thanks. our thanks to you, as well, mickey >> thank you when we come back, the koch brothers backing a nearly $3 billion bid to buy time inc. we're going to talk to time editor walter isaacson and kara fisher about the deal. later an exclusive with ken griffin. you do not want to miss that and records across the board now for the dow, the s&p, and the nasdaq "squawk alley" continues in just a minute [lance] monica, it is absolute chaos out here!

gale force winds, accumulations up to 8 inches... ...don't know if you can hear me, but [monica] what's he doing? [lance] can we get a shot of this cold front, right here. winter has arrived. whooo! hahaha [vo] progress is an unstoppable force. brace yourself for the season of audi sales event. audi will cover your first month's lease payment on select models during the season of audi sales event. at t-mobile, when you holiday together, great things come in twos. right now when you buy any of this season's hot new samsung galaxy phones, you get a second one free to gift. that's one samsung for you. one to give. t-mobile. holiday twogether.

publisher meredith is buying time inc. valued at $2.8 billion, bringing magazines like s.i., time magazine, people, and better homes and gardens under one roof meredith's offer is backed by billionaires charles and david koch for more let's bring in kara swisher, along with aspen institute ceo and former

managing editor of time magazine, walter isaacson. morning, guys, good to see you both >> morning >> walter, it's quite a deal did you ever envision this day >> well, no. of course, it's a storied empire, time incorporated. i was there for more than 25 years. it's good that it's a heartland company, i do worry about the structure of this deal and wonder if a company like meredith that specializes in family and women's magazines like "better homes and gardens" is going to want to keep "time" and "fortune." that will be an interesting thing to watch, whether or not "time" or "fortune" would be put up for sale and that might be an indication what the koch brothers' involvement may or may not be >> "sports illustrated," as

well, i would imagine. kara, what's this mean in the broader universe of media, digital media, what's happening right now in the disruption in advertising? do you expect to see a feeding frenzy among some of the titles meredith might not want to keep? >> i don't think it's a feeding frenzy "time" magazine is an iconic magazine, so is the entire empire, but it's been a long, slow fall since path finder, as far as i'm concerned i don't imagine it's as big a deal as people are making it because i don't think these titles had been as relevant as they had been about a decade now at least walter worked there during the most golden era of that kind of thing, and it's passed so i wonder -- they'll probably be sold off, but you have "rolling stone" for sale, all kinds of magazines for sale. >> exactly, so what does it mean >> i don't know. it means people don't read magazines anymore and they get their information elsewhere, so the question is, who's going to be buying these, who's going to be reading these magazines, how

do they make them relevant for the present, or brands just die. that's just the way it goes, unfortunately for this one, which has, you know, served this country really well as a title, "time" magazine is, as i said, iconic, but i don't know if it's going to be a feeding frenzy where everybody wants to get ahold of it. i doubt that's the case. >> carl, can i make another point for a second >> of course >> which is when i was at time inc. and "time" magazine, the jewel in the crown was the tens of millions of people in the database and as we moved online, got the credit card numbers, their e-mails, that was the type of thing you're watching and amazon, its acquisition of whole food, partly loyalty programs, who's in your database, and if i'm looking at what could be very valuable, even if you look at what the koch brothers own, they own i-360, which is a political data analytics firm, so part of what is going to be in that empire is everybody who

has bought a christmas ornament from martha stewart, to "better homes and gardens," people who play golf and get the "sports illustrated" edition, those type of things could be valuable in a digital future >> they certainly could be, kara, i would imagine, but when you look at that sort of database, to your point, kara, what type of people are in the database are these the most desirable customers and the demographic anybody wants, or can you just buy that information from another place that might be more relevant for the goods that you're trying to sell? >> yeah -- >> trying to do politics, it's a little bit different >> sorry you know, "time" would try to do that under the recent ceo rich batista. trying to do commerce, a lot of things using that database, and that is what's attractive in this deal, to marry it into the koch brothers' other databases they have, political databases,

all kinds of things. so, you know, unfortunately with a lot of these titles, "people" and "time" and "fortune," they've still got a resonance. what would i do if i had "fortune" magazine they have the great conferences, they have a great brand, they've got some amazing reporters i think about that, but i don't think about it in the price ranges they used to be worth, and formatting them in the way they used to present information. so i think it's got to be a creative person buying one of those titles or they just fade away, as did "life" magazine and other things >> yeah. i mean, there's the live business, kara, as you point out. there's the franchises, the time 100, fortune 500 obviously, the swimsuit issue for "s.i." the combined company would have the sixth largest u.s. digital

audience i can't believe they are buying these things just to jettison them away. >> probably not, and the brands are iconic i think kara is right, it's been a struggle and i was there at the very beginning of the struggle but watched it from afar the past ten, 12 years, to bring it into the digital age. one of the things kara is an expert on is combining conferences, databases, in-person events, online things like recode is for kara, and we tried that early on with the time 100 i do think that the fortune brand is very good in the conference space, so somebody who could marry conferences, databases, good reporting, good journalism, online magazines and print magazines could make a good go of it, especially with the iconic brands that meredith may not want, which is "sports illustrated," "fortune," and "time" magazine. >> walter, you want to buy it

with me? we could try something >> yes, i'd love to do that. actually, every now and then i wake up in the evening and, you know, at night and say, as you just did about "fortune," wouldn't it be fun to have these brands again, what would you do to make them relevant in the 21st century >> sounds like a feeding frenzy to me starting here on "squawk alley. >> other people are dreaming it. >> kara, a lot of thereports about the deal today focus on the koch influence would be influence of course, the company says no influence on editorial or managerial operations. how serious a question is it >> i don't believe them. i think they are not telling the truth. that's ridiculous. you don't buy a media operation if you don't want some influence, you know, it's just -- okay, all right. if they say so you know, again, i think it's -- i think a lot of stuff when it comes out in these press releases -- did you laugh when you read that, or not?

maybe it's just me i think you buy these media brands in order to have media influence. they could do something interesting with time, but certainly going to be different. again, as i reiterate, a lot of this happened a long time ago, and walter remembers this with path finder. when they failed there and failed with aol and tried nine different digital -- this has been going on. this has been a long, slow fall down a very long digital stair case that has happened again and again. so this is just probably inevitable it's a very good price, so people on the board should be happy they got the price up. obviously, the kochs didn't buy it for not having influence. we'll see what they do with it, but it's theirs now and it's meredith's to figure out what to do with it or sell pieces off. we'll see where it goes from here >> if you guys do that deal, we're going to play this tape back and we want partial credit. kara swisher -- >> you'll get your 10% finder's fee if we wake up tomorrow and

buy the storied titles >> kara swisher, thanks so much for joining us >> i don't have any money. >> all right, still to come, details behind what's fuelling the video game console comeback this holiday shopping season we're going to speak with the head of sony's playstation network next plus, don't meet my exclusive interview with andy jassy wednesday right here on "squawk alley. we're back in a moment you always pay

your insurance on time. tap one little bumper, and up go your rates. what good is having insurance if you get punished for using it? news flash: nobody's perfect. for drivers with accident forgiveness, liberty mutual won't raise your rates due to your first accident. switch and you could save $782 on home and auto insurance. call for a free quote today. liberty stands with you™ liberty mutual insurance.

♪ traders -- they're always looking for advantages. the smart ones look to fidelity to find them. we give you research and data-visualization tools to help identify potential opportunities. so, you can do it this way... or get everything you need to help capture investment ideas and make smarter trading decisions with fidelity for just $4.95 per online u.s. equity trade. fidelity. open an account today. ♪

cyber monday is under way. the latest gaming consoles a big focus of the holiday shopping season the playstation 4 and the playstation vr headset among this year's most sought out products as a matter of fact, sony said playstation saw its best black friday in company history. joining us now for a cnbc exclusive interview is senior vice president and head of playstation network at sony. eric, good morning, welcome. >> good morning, john, thanks

for having me. >> so i want to talk first about ps plus, the subscription service connected to playstation network. there's a lot of buzz on the interwebs this morning about the discount you have. normally it's about $80 a year right now it's on sale for $40 a year and people get two monthly game downloads, i believe, multiplayer capability, discounts. 50% is a big discount. what exactly are you trying to drive here, and who's the target gamer? is it an enthusiast shopping season >> so let me just correct you there for one sec, john. the actual retail price normally is $59.99, so it's about a 33% discount nonetheless, it's a great discount for consumers with that, we're targeting the entire playstation audience. plus is an essential part of the playstation offering it allows you to play games online, brings you deeper into the community, and gives you a lot of value with discounts on the playstation store, as well

as free games every month across a wide variety of genres >> but what are the economics behind this move i mean is it kind of like selling the conceal at a discount expecting more money to come throughout the year how much more benefit are you going to get from the people who sign up during the season at this discounted price? >> well, it's black friday as you mentioned earlier,we ha the biggest black friday in playstation history, sold more consoles than we have in the 22-year history and plus is a natural addition to the purchase, so we wanted to add value to the consumer. really anything can happen on black friday, so we wanted to make sure people went in, bought a console, and bought playstation plus, because they'll get a lot of value with their new console purchase in addition to that, the price discount is available to current playstation users. if they have playstation plus and want to stack their subscription or renew it, they can do to, as well >> four years ago the narrative was that smartphones and games

on smartphones were going to eat the lunch of consoles. how has the market segmented as smartphones have gotten more mature and you guys in the console and higher end gaming industry have gone to kind of these incremental upgrades of the hardware we're seeing more higher end systems from sony, from microsoft, et cetera, coming more often >> so, going into this generation, as you mentioned, a lot of people are counting out the console business and saying it wasn't going to work out, but the playstation 4 business is thriving last month sony corporate reported their earnings. profits were up 346% the majority was fuelled by the playstation business we're having a phenomenal year, sold more con soesoles than eve before we introduced mid cycle innovation for the first time last year with playstation 4 pro and that's something new, but it's in the playstation 4 family, so any consumer can jump

in on the 1 terabyte playstation 4 or a pro and get value out of either console >> finally, your take on virtual reality. a lot of people expected it to be a bigger deal than it has been so far, facebook had oculus, hoping to have a big season last year, that didn't happen how significant a piece of the sales this season are going to be virtual reality, or is this more of an accessory to the main console? >> it's definitely not an accessory. we see virtual reality virtual reality as something entirely new, brand new technology, very exciting consumers absolutely love it we're learning a lot about this market now that we're a year into it. back in june we announced we sold a million units, a lot has happened since then. we had deals on virtual reality for black friday we had our bundle with our game for $299 as well as our sky room bundle for $349 and consumers absolutely love this product the important thing is for people to try it

there's a lot of virtual reality out there, but playstation vr is unlike anything else anybody has seen john, i know you've tried it, and there's a lot more to come what we're seeing with vr is consumers love the big immersive games. earlier this year cap com released 7, just released sky room and later this week a big gaming franchise, doom, is coming to playstation vr a lot of life -- a lot to come we're just scratching the surface on this new technology >> that's all we were able to do in this segment, but thank you, eric, for joining us i don't know where you get your pricing on the playstation plus side i still see $79.95 for a full year >> definitely not. thank you. >> great, let me people. thanks, eric >> thank you 30 seconds until europe closes let's get seema mody at hq >> european stocks are beginning the week mostly on the downside dragged down by the energy

sector seeing oil ease back ahead of the opec meeting in vienna weakness in the dollar initially pushed the euro to a two-week high a survey came in at a record high in november and interestingly enough comes as german politics remain in high focus. hours ago in berlin, angela merkel said her conservative blog is willing to start coalition talks with social left democrats and stressed the importance of achieving stability in germany after previous talks collapsed meanwhile, bund yield falling today in light of the news surrounding germany, 0.3%. moving on to stocks, surprise departure has sent shares down sharply down as much as 6% or more the ceo has resigned the sudden move underscores the fierce competition between the two private swiss banks that

managed wealth in europe, as well as in asia. guys >> all right, thank you very much, seema mody took a bit of a spill here, the s&p did go red just a touch to 2600 let's get to sue herera and get a news update. good morning, sue. >> good morning, everyone. here's what's happening at this hour mick mulvaney, president trump's pick to lead the consumer protection bureau expecting agency staff to disregard directions from leandra english, who was named acting director by the former head of the agency. english filed suit against trump and mulvaney late last night more than 400 migrants rescued over the weekend arriving in sicily this morning. they were in a wooden boat adrift tripoli hamas officials specifically says that group will not disarm in gaza, saying it's a source of power for all palestinians the remarks highlight the

differing views between hamas and palestinian president abbas' movement who wants the group to lay down arms. a new study says x-rays could help doctors identify victims of domestic abuse. they noticed many abused patients had soft tissue injuries and fractures to the hand, wrist, and face. that's the news update this hour back downtown to "squawk alley." carl, back to you. >> all right, sue, thank you very much. when we return, an exclusive with citadel ceo ken griffin here at the nyse the dow, nasdaq, and s&p having set records this morning, but off session highs. "squawk alley" back after this nah. not gonna happen.

that's it. i'm calling kohler about their walk-in bath. my name is ken. how may i help you? hi, i'm calling about kohler's walk-in bath. excellent! happy to help. huh? hold one moment please... [ finger snaps ] hmm. the kohler walk-in bath features an extra-wide opening and a low step-in at three inches, which is 25 to 60% lower than some leading competitors. the bath fills and drains quickly, while the heated seat soothes your back, neck and shoulders. kohler is an expert in bathing, so you can count on a deep soaking experience. are you seeing this? the kohler walk-in bath comes with fully adjustable hydrotherapy jets and our exclusive bubblemassage. everything is installed in as little as a day by a kohler-certified installer. and it's made by kohler- america's leading plumbing brand. we need this bath. yes. yes you do.

a kohler walk-in bath provides independence with peace of mind. call to save $500 off bath walls with your walk-in bath, or visit kohlerwalkinbath.com for more info. we are the driven... the dedicated... the overachievers. we know our best investment is in ourselves. we don't take no for an answer. we fight for what we want. even for the things that were once a given. going to college... buying a home... and not being in debt for it for the rest of our lives.

but we're only as strong as our community. who inspires and pushes us to go further than we could ever go alone. sofi. get there sooner. two-year notes up for auction. what's demand like, rick >> you know, demand was weak let's go through it all. two-year note auction $26 billion. we're going to have two auctions today. at 1:00 eastern i'm going to bring out the five yield 1.765. darn close to where they were trading, that was the bid side we'd rather have it be the offer side, but that was the bid side. here's the interesting thing

highest yield for a two year since september of '08, but it was a crummy auction i gave it a d-plus 2.73 bid to cover, weakest since january '17, second lowest of the year 41.9 on indirect weakest since december of 2016 the only bright spot other than the fact a price close was 17% for directs, that was pretty good 41.2% go to primary dealers, that's never a good thing. d-plus for the first leg melissa lee, back to you >> thank you very much, rick santelli citadel hosting a data thon for potential hedge fund talent here at the new york stock exchange so let's send it over to the floor with leslie picker and citadel ceo ken griffin. >> thank you so much for joining us the data open, in many ways it's a metaphor for the competition hedge funds face in order of recruiting talent. can you give us a sense of why you do this competition and the competition for talent you're experiencing today in the hedge

fund industry? >> so this competition is about finding individuals who have really great problem solving skills and problem solving skills when it comes to the use of big data, which is a topic very near and dear to our hearts and financial markets today, which is how do we use all the data that's coming into existence at an ever accelerating rate to better understand the companies that we invest in. and then for the war for talent amongst hedge funds, finding great investors has always been a challenge for us in finance. great investors like great basketball players, hard to come by, have almost a gift, the ability to assimilate information, draw concludesions, and act on their beliefs it's a unique and hard skill to find >> these days investors need tech skills, as well quantities becoming more important, artificial intelligence becoming more important and you're competing to acquire that talent do you ever think there's a risk of a culture clash between

silicon valley and the hedge fund industry as you reshape the recruiting backdrop? >> we've used technology at citadel almost 30 years. the ordinance of the firm was about applying to financial markets. we've moved past that starting market today using fundamental analysis good old fashioned stock picking. i don't think there has to be a culture clash to make this work. we compete for gifted individuals, always competed across a variety of industries for gifted individuals there's nothing new there. what is new is that many of our great portfolio managers today, they are great at getting through 10 ks, great at understanding a management team's presentation, great at understanding a business mission objective, how they create value for their customers, but also great at knowing how to interact with data scientists and analysts who can help them understand how is a business performing in real time. so the mix of skills required for success is changing, and our

great portfolio managers are able to embrace that change in how they practice their art. >> and one of the biggest beneficiaries we've seen in the hedge fund industry is quandt. citadel does both. how do you look at recruitment these days and the application of more technology in your trade something. >> well, there's been a rise of quantitative trading strategies over the last 30 years and today we're at probably a peak in capital deployed with these strategies this is part of the progress forward. there's an understanding that many dynamics of how humans behave can be in a sense taken advantage of by technology if we know how humans behave and we can predict that, we can use that to better position our portfolios and a number of quantitative strategies rely upon human biases and behavior to be successful so as we understand this look at the recent nobel prize

in behavioral economics. as we understand this, we'll use computers in new and innovative ways to better drive the pricing and assets in financial markets. >> i want to talk to you about your out performance this year i heard from a source 2% for the month of october and 11.4% in the year through october what was the key to some of the outperformance that you're experiencing this year specifically >> we're having a solid year, and like most years it's driven by good old fashioned stock picking with 700 people at citadel who understand the businesses that are represented here on the floor of the new york stock exchange, whether it's disney, a number of businesses here on the new york stock exchange it's understanding these businesses, their business models, how they create value for their customers and whether or not they are outperforming or underperforming expectations that's the heart of our business, understanding which businesses are outperforming expectations, which are underperforming expectations and positioning accordingly. that's what we do day in and day

out. >> you've spoken in the past how the market has increasingly become more efficient over time. what's that mean for the hedge fund industry specifically, and if there is this move forwards efficiency in the marketplace that makes this harder to generate alpha, why should anyone would money into a hedge fund in the first place? >> we want our markets to be efficient because that's how we allocate capital as a society. we want companies to be able to have the lowest cost to capital so they can have the funds and resources to reach their vision. so our capital markets, the goal of our capital markets is the efficient allocation of capital, one of our scarcest resources in society. now, as we march forward, as we become better investors, then markets will be more efficient and capital will be more efficiently deployed for hedge fund managers it's a constant challenge how do you need to reinvent yourself such that you have the skills that are applicable at this moment in time to

understand which businesses are going to flourish and which ones are not. and that's an always changing set of skills. when i started, and i'm not that old, state of the art, that was real time news and you could get a single stock price at a single time today that's in the hands of millions of retail investors with much better access to news and information than we had 30 years ago. so you can imagine how the skills required to be a great investor have changed over just the course of my lifetime or your lifetime. >> in terms of just the contours of the market right now, we've seen for a while rising valuations in the stock market, low volatility a lot of people have been pontificating on when exactly that's going to turn what do you say when you look at the stock market today and what it says about the cycle? >> so, we're clearly at valuations that are more stretch than typical, but we're also in a very, very constructive

environment for stock prices we have extremely low inflation, thankfully, and low interest rates, and those two combined create a strong underpinning for valuations there's no doubt that valuations are somewhat stretched, but remember the backdrop. low rates, low inflation, reasonable growth in revenues, the ability to bring profits to the bottom line. these are supportive dynamics for stock prices >> and yet here we are looking at the potential for tax reform, which a lot of people say may not even be fully priced into the markets at this point. do you believe it's the right time in the business cycle to be doing tax reform >> so we're late in the business cycle and to the extent this is a move that would be stimulative in nature, you would usually reserve tax reform of this nature for right in the midst of a recession. so to the extent this represents fiscal stimulus, this is a latent business cycle move it would be contrary to what you would do from an economics perspective. >> should we not do tax reform at all >> there's a couple things to think about here

number one is the tax reform for individuals is well thought out. eliminated the alternative minimum tax, for example, is really helpful for millions of americans in terms of the burden of our tax paperwork in our country. bringing in our corporate rate down to a level more competitive with the oecd is good for corporate, capital formation here in america. do we need to cut taxes as much as we are? probably not do we need to reform taxes, simplify taxes, and keep america competitive? absolutely >> so are you saying corporations don't really need the 20% rate that they are talking about today? >> if we look at the oecd means, which are in the mid 20s, i don't understand why we're not closer to that number. i would have thought we would have landed somewhere around 25% for our corporate rate, not 20, but probably not worth splitting hairs over >> i want to talk to you about bitcoin, because over the weekend it surpassed $9,000. this is something that a lot of

people in the modern day haven't seen anything like that before you know, what's your take on bitcoin? is it a fraud as jamie dimon says, or is it the future of currency as we know it >> it's not the future of currency and i wouldn't call it a fraud either and i think what is happening is people confuse bitcoin with block chain. block chain is a very interesting technology that will have some very profound applications very society over the years to come. bitcoin is a crypto currency that relies upon block chain for how it's transferred between parties. bitcoin right now has many of the elements of the mania we saw hundreds of years ago in holland. i get very worried that people who are buying bitcoins don't really understand what they are participating in other than the headline stories of it keeps going higher, and i want to make sure i don't miss this opportunity to make some money

so it is a fraud no, but these bubbles tend to end in tears >> that's one of the bubble signs people tend to point to. other people are looking at the high yield market and saying cracks are showing there are you looking at that market as a signal for what it means for equity prices? >> so high yield market has been very, very robust over the last several years. tremendous amount of issuance, tremendous amount of capital raised in particular in the energy space, where we've had quite a bit of turmoil over the last three years in the back of oil prices the great upside of fracking in the shale revolution here in the united states has been a dramatic decrease of the price of natural gas and oil for all americans. profound decrease, one that was not foreseen by most of us just three or four years ago. the problem with this is that for the companies in the energy space, these lower prices have made their business models much more challenged and created

quite a bit of turmoil in that segment of the high yield market so i would not extrapolate some of the trials and tribulations of the energy space across the broader high yield market. and remember, lower energy prices are good for america, so although this has been tough for the american businesses in that space, for the american consumer, we're looking at oil prices and natural gas prices that we just haven't seen in decades. >> as you look at the equity market as a whole, do you believe it's undervalued or overvalued >> i think we're in the seventh inning of this market rally. as i said earlier, valuations are stretched. we're not at the -- we're not in the sort of classic mania that you get at the very end of a bull market. somewhat like the mania we see in bitcoin today >> seventh inning from a chicagoan over here, ken griffin, thank you so much for joining us back over to you, carl >> leslie, wonderful stuff thank you so much. our leslie picker here at the nyse with ken griffin. back in a moment as the t fr indexes have come closer

tohelat line after up 70 points on the dow. back in a moment you always pay

your insurance on time. tap one little bumper, and up go your rates. what good is having insurance if you get punished for using it? news flash: nobody's perfect. for drivers with accident forgiveness, liberty mutual won't raise your rates due to your first accident. switch and you could save $782 on home and auto insurance. call for a free quote today. liberty stands with you™ liberty mutual insurance.

i'm scott wapner. coming up on "the halftime report, why the "which parts of the market are primed to outperform at the ebb of the year we'll discuss and debate that question and top rate annist to tony sa tony sakinagi joins us and after

square's 240% run this year, why is one analyst saying to get out while you can? "halftime report" starts noon eastern and we'll see new about ten minutes. >> looking forwardto it. rick santelli with the santelli exchange rick >> thank you, john you know, this morning my guest was dr. lacey hunt and we talked about the u.s. recovery and it is the weakest post-war recovery ever so let's talk about the recovering recovery and has the last year since the election changed anything in his mind regarding that this is not a great recovery the answer is no obviously if you're full pedal to the metal owning stocks you might have a different answer because the stock market, obviously after november 8, really has skyrocketed you heard carl backing away from today's highs, but seems like almost every day we toy with historic highs today we had another piece of data out 10:00 eastern, it was new home

sales, and hopefully you're looking at a chart now a wonderful number it was 685,000 seasonally adjusted an annualized units, the highest since, well, '08 here's the problem though is that the all-time high was more than double so you take 685,000 and multiply by 2 and get 1.37 million. in july of '05 we were at 1.39 million. the point is that, yes, we have recovered, but if you think housing is a canary in the coal mine recovery sometimes isn't enough, and it really goes to the heart of the issue we're trying to make fiscal changes. we haven't done that in a while. on tap now tax reform, but in the end we're all debating is tax reform worth it? we had an op-ed with big names like larry lindsey on it saying yes and i get the logic. anything that's an improvement

over what we have is better than what we have and that isn't a bad way and in the end lacey hit it the problem is that we put a lot of social accent marks on all our programs including taxation. maybe there's better ways to do that, but in the end lacy was worried about deficits, so am i. he's worried about spending, so am i but baseline spending isn't addressed and it isn't the discretionary spending think alan simpson all the other big things around entitlements and until we get those under control i'm not sure that this recovery is going to recover as good as we need it to melissa lee, back to you. >> rick santelli, thank you. as we head to break, let's take a check on the markets. we're seeing fresh records for facebook, alphabet and adobe and amazon.com domagi to ayw nangst in the green. "squawk alley" will be right back

it's a small finger...a worm! like, a dagger? a tiny sword? bread...breadstick? a matchstick! a lamppost! coin slot! no? uhhh... 10 seconds. a stick! a walking stick! eiffel tower, mount kilimanjaro! (ding) time! sorry, it's a tandem bicycle. what? what?! as long as sloths are slow, you can count on geico saving folks money. fifteen minutes could save you fifteen percent or more on car insurance.

watching shares of square today, down more than 10%. getting a downgrade over btig though the stock, as you can tell, has more than tripled in the last yr.ea more "squawk alley" after the break. don't go away.

duncan just protected his family with a $500,000 life insurance policy. how much do you think it cost him? $100 a month? $75? $50? actually, duncan got his $500,000 for under $28 a month. less than $1 a day! his secret? selectquote. in just minutes a selectquote agent will comparison shop

nearly a dozen highly rated life insurance companies, and give you a choice of your five best rates. duncan's wife cassie got a $750,000 policy for under $21 per month. give your family the security it needs, at a price you can afford. since 1985, selectquote has saved over a million families millions of dollars on life insurance.

got some records on the dow, the nasdaq and s&p and s&p retail index before settling back here mid-section. i noticed that andy jassy on wednesday will be a big interview for you, jon >> not just because of amazon's retail performance, a big season for cloud and retail needs capacity and amazon is one of the main places they go. >> macy's certainly a focus, we

had the ceo on on friday it was very positive today they had problems processing gift card and credit card transactions. >> given the growth online surprising we didn't see more of those. see what the season brings let get over to scott wapner and "the half" back at hq. and welcome to "the halftime report." i'm scott wapner our top trade this hour. the stretch run setup with just five trading weeks left in 2017. why stocks are primed for another push higher. the question is which sectors are likely to see the biggest bumps into year's end? with us for the hour today, joe terranova, steve weiss, josh brown and surat atip and kevin o'leary joining us as well stocks hitting new highs today and falling back a bit and the dow manages to be in the green, up 36 points